Car value question... Help!

[BMSe92]

Ok I know there are some guys on the forum that are really good with this value and depreciation crap. My question...

Is there any way or calculation of knowing what a vehicle will be worth in say two years? I know it would be a ballpark because mileage,condition, etc will vary...

So for instance if someone were to purchase a new M4 with a sticker price of say $80k, in two years with average mileage, in excellent condition. What would it be worth!

I know there are a bunch of variables involved but just looking for some solid info.

[bb1857]

Originally Posted by BMSe92

Ok I know there are some guys on the forum that are really good with this value and depreciation crap. My question...

Is there any way or calculation of knowing what a vehicle will be worth in say two years? I know it would be a ballpark because mileage,condition, etc will vary...

So for instance if someone were to purchase a new M4 with a sticker price of say $80k, in two years with average mileage, in excellent condition. What would it be worth!

I know there are a bunch of variables involved but just looking for some solid info.

Take a look at what 2015s are going for now and you'll have your answer. Most 2015s are listed somewhere from $64-70k. Now that doesn't mean they are selling at that number. I think low to mid 60s is a fair buying price for a nicely equipped 2015 so the trade in on that same car was probably in the neighborhood of $56-59k.

Also keep in mind that around 2019 there will likely be a model year gap where there is no M4 so that may push values up just a bit but that is pure speculation.

[MPerformance211]

My guess is closer to $55K

[AQ1]

Some real data--My 2015 got trade-in quotes for 59-60k before any negotiation. Clean carfax with low miles, MSRP was about $75.

[dkhm3]

i agree with everyone here, 55k-59k, which works out to be about 1,200 a month over 24 months assuming 10k-12k a year mileage.

compare that to owning that same car over a 6 year term and I would venture the per month depreciation would be in the 700-750 range.

consider leasing? it is likely cheaper for short term usage.

[BMSe92]

Let me explain why I ask...

A friend of mine keeps buying sick ass cars every year or two. Skyline, R8, Maclaren. He told me he buys them a few years old where most of their depreciation has already set in. He finances the car over 84 months.

So his monthly payment is like $1100-1500. Then after a year, he sells the car for like 95% of his original buying price because it hasn't depreciated greatly in that time.

So essentially his lose is minimal... Say 500-600/ month. (Less than I pay for my 435 per month)

Trying to understand the whole concept and if it's legit or if there's something he's leaving out

[BMSe92]

And there's another kid in my area that does the same thing.

Had a M4, then I8, now a lambo huracan. Had each for like 8 months maybe

What am I missing? Ha

[dkhm3]

Originally Posted by BMSe92

Let me explain why I ask...

A friend of mine keeps buying sick ass cars every year or two. Skyline, R8, Maclaren. He told me he buys them a few years old where most of their depreciation has already set in. He finances the car over 84 months.

So his monthly payment is like $1100-1500. Then after a year, he sells the car for like 95% of his original buying price because it hasn't depreciated greatly in that time.

So essentially his lose is minimal... Say 500-600/ month. (Less than I pay for my 435 per month)

Trying to understand the whole concept and if it's legit or if there's something he's leaving out

yes, he is leaving out tax, at least in CA where I live it is 8% on vehicles.

resale @ 95% also sounds ridiculous. 85% of the value of the car plus tax sounds more like it.

[bb1857]

Originally Posted by BMSe92

Let me explain why I ask...

A friend of mine keeps buying sick ass cars every year or two. Skyline, R8, Maclaren. He told me he buys them a few years old where most of their depreciation has already set in. He finances the car over 84 months.

So his monthly payment is like $1100-1500. Then after a year, he sells the car for like 95% of his original buying price because it hasn't depreciated greatly in that time.

So essentially his lose is minimal... Say 500-600/ month. (Less than I pay for my 435 per month)

Trying to understand the whole concept and if it's legit or if there's something he's leaving out

Its likely legit but there area ton of factors. Buying the car at the right price, getting a good interest rate so the principal is maximized right away, and then finding the right buyer when it comes time to unload it. It's a dangerous game that I would never consider it because the pool of buyers for those cars is very small and the chance of getting left holding the bag for much longer could bite you in the ass big time. He is probably only telling you the good stuff because who is going to run their mouth about how they got dicked over on a bad car deal? Not many people would tell those stories but everyone wants their friends to think they are the shrewdest car buyer in the world.

And yes he is leaving out taxes, title, registration, etc plus insurance isn't cheap on those whips....telling you the good stuff to make you think he is amazing....sounds like he is a good storyteller to me.

[bb1857]

Originally Posted by BMSe92

And there's another kid in my area that does the same thing.

Had a M4, then I8, now a lambo huracan. Had each for like 8 months maybe

What am I missing? Ha

You're missing a shitload of cash thats needed to pull this off. You can't flip these cars and not lose your ass unless you're a dealer that avoids a huge majority of the fees associated with car buying and selling.

[Naz24]

Originally Posted by bb1857

Its likely legit but there area ton of factors. Buying the car at the right price, getting a good interest rate so the principal is maximized right away, and then finding the right buyer when it comes time to unload it. It's a dangerous game that I would never consider it because the pool of buyers for those cars is very small and the chance of getting left holding the bag for much longer could bite you in the ass big time. He is probably only telling you the good stuff because who is going to run their mouth about how they got dicked over on a bad car deal? Not many people would tell those stories but everyone wants their friends to think they are the shrewdest car buyer in the world.

And yes he is leaving out taxes, title, registration, etc plus insurance isn't cheap on those whips....telling you the good stuff to make you think he is amazing....sounds like he is a good storyteller to me.

Sounds like he lives with his parents and drives a lambo. Do not aspire to be him.

Look its great if you are careful, i have a friend who does the same, but don't be fooled, he spends a ton of money in this game and everytime he finances a car again, he rolls some negative equity into the next. Its really not a good way to live.

It's like the guy who has all new clothes, shoes, watches, etc, but is underwater with 30k in cc debt. its all a facade, do not get caught up in it

[Fahrvergnügen]

Originally Posted by dkhm3

yes, he is leaving out tax, at least in CA where I live it is 8% on vehicles.

resale @ 95% also sounds ridiculous. 85% of the value of the car plus tax sounds more like it.

95% doesn't sound too far-fetched if OP's friend is buying them 1-2 years used. Once the initial depreciation hits the first 24 months it slows down a bit for most cars. I could imagine a new $180k R8 depreciate to about $150k after 2 years. Once this guy buys it used and sells it after it is 3 years old, he could probably get $140k if the miles aren't crazy.

I bought my M4 new for ~$75k in 2014, had trade in offers spring of this year between $60k to $64k, took $62k at the dealer that had the 1M. That's about 17% depreciation. Tax is a different story though.

[Fahrvergnügen]

Originally Posted by Fahrvergnügen

95% doesn't sound too far-fetched if OP's friend is buying them 1-2 years used. Once the initial depreciation hits the first 24 months it slows down a bit for most cars. I could imagine a new $180k R8 depreciate to about $150k after 2 years. Once this guy buys it used and sells it after it is 3 years old, he could probably get $140k if the miles aren't crazy.

I bought my M4 new for ~$75k in 2014, had trade in offers spring of this year between $60k to $64k, took $62k at the dealer that had the 1M. That's about 17% depreciation. Tax is a different story though.

Btw, I am not condoning doing what OP's friend is doing. It seems very risky and poor money management due to all the reasons others have listed. Just think of all the time and money spent on selling the car, buying a new car, titling it, inspecting it, registering it, buying city stickers, changing insurance, etc. Unless I had someone to do all of that for me I wouldn't change cars so much even if I had the money.

[katit]

In MO we pay tax for difference, if you don't buy "more" of a car - you pay $0
(bought $100k car, sold $95k - tax on $5k)

If you buy right and sell right - you can even make money on cars. I did that before for fun, not on $100k cars though But I bet it can be done.

Only issue is - timing. You need to find and grab a deal. And same thing with a sale - it may take time. It's pretty much constant game. And, unless you can keep 2x $100k cars at the same time - you may need bicycle to ride when you sell one and looking for another

[BMSe92]

All good points. Thanks guys, was just trying to make sense of this. Figured there were a bunch of mentioned shit.

[AQ1]

Agree with Katit on tax--same here in NY. Only tax on the difference.

[BMSe92]

I know a lambo is not partial but id like to get into an M4 in a year when my lease is up. Any tips for when I'm in the market?

[RickFLM4]

Maybe if buying at auction and selling retail but in the absence of unusual economics, 5% depreciation for year 2 or 3 of a sports car does not sound realistic to me.

[m4282]

Originally Posted by Fahrvergnügen

95% doesn't sound too far-fetched if OP's friend is buying them 1-2 years used. Once the initial depreciation hits the first 24 months it slows down a bit for most cars. I could imagine a new $180k R8 depreciate to about $150k after 2 years. Once this guy buys it used and sells it after it is 3 years old, he could probably get $140k if the miles aren't crazy.

I bought my M4 new for ~$75k in 2014, had trade in offers spring of this year between $60k to $64k, took $62k at the dealer that had the 1M. That's about 17% depreciation. Tax is a different story though.

That's 17% for one year then- as the 2014 is really a 2015. Is this good?

I just got a 2016 m4 full leather , executive , parking and heads up back up camera and adaptive lighting. with individual paint MSRP for 82500 but negotiated to 77500. What do you think in 3 years this will be? My guess is about 45-47, thoughts?

[tn002]

IMHO these cars are meant to be driven and enjoyed not bought and sold (unless there are extenuating circumstances). The recent article that they have the best resale value in its class should give you some peace of mind.

[David70]

Originally Posted by BMSe92

Let me explain why I ask...

A friend of mine keeps buying sick ass cars every year or two. Skyline, R8, Maclaren. He told me he buys them a few years old where most of their depreciation has already set in. He finances the car over 84 months.

So his monthly payment is like $1100-1500. Then after a year, he sells the car for like 95% of his original buying price because it hasn't depreciated greatly in that time.

So essentially his lose is minimal... Say 500-600/ month. (Less than I pay for my 435 per month)

Trying to understand the whole concept and if it's legit or if there's something he's leaving out

I am skeptical of some of the numbers including financing a used car over 84 months (virtually none of the payment in the first year is paying down the principle), then being able to buy used cars and sell them for 95% of what you paid for them a year later.

Assuming he isn't putting many miles on them as these cars have big depreciation when you put a lot of miles on them.

Edit - Also looks like at 4% he is financing about $80,000 and putting the other $70,000 down?

[paliknight]

Originally Posted by m4282

That's 17% for one year then- as the 2014 is really a 2015. Is this good?

I just got a 2016 m4 full leather , executive , parking and heads up back up camera and adaptive lighting. with individual paint MSRP for 82500 but negotiated to 77500. What do you think in 3 years this will be? My guess is about 45-47, thoughts?

Im in the same exact boat. same exact car and msrp. im pretty sure in 3 years it will be in the 50's, not 40's.